Market observers are divided as to whether BlackRock, Fidelity, and Invesco’s Bitcoin ETF offerings are motivated solely to temporarily pull money out of their clients’ pockets, or whether they represent a long-term commitment to the digital asset class. A classification.
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We’ve covered the Bitcoin ETF filings by Wall Street giants like BlackRock, Fidelity Investments, and Invesco before . One point of contention is the extent to which wealth managers are serious about the digital asset class.
Bitcoin ETFs: Just a Pump and Dump Scheme?
For the internationally known gold advocate and bitcoin critic Peter Schiff, the matter is clear. In an interview with BTC-ECHO, he compares BlackRock and Co. to casino operators who deliberately take money out of their customers’ pockets and act purely opportunistically:
First they generate publicity and when prices have gone up they resell and possibly use a small portion of those profits to cover some of the cost of creating those products. It’s like a pump and dump scheme.Peter Schiff in an interview with BTC-ECHO
If you agree, these players’ bitcoin spot ETFs are a cross between a Trojan horse and a shell game that has nothing to do with beliefs at all. On the contrary, anti-bitcoin and other cryptocurrencies tend to manifest on Wall Street.
BlackRock CEO Larry Fink in no uncertain terms
This contrasts with the words of BlackRock CEO Larry Fink. In an interview with Fox Business news channel, he expressed his strong belief in Bitcoin: “Crypto is digital gold and Bitcoin is an international asset…it can represent an asset that people can use as an alternative,” Fink continues.
Of course, one can argue that this statement is only part of the selling strategy if BlackRock gets permission to issue a bitcoin spot ETF. On the other hand, Larry Fink has a reputation to lose. Certainly not a minor matter for the billionaire. If Fink didn’t think anything of Bitcoin at all, it would be incredible that he would allow himself to be carried away by such a statement in public.
Only administrators, not always decision-makers
Even if BlackRock and its advisors can influence the investment strategy of its customers, it is still these who make the buying and selling decisions. After all, an ETF is just an offer that you offer to potential customers. So, unlike an actively managed hedge fund, an ETF provider’s hands are pretty much tied.
A pump-and-dump scheme, as predicted by Peter Schiff, is therefore rather difficult for ETF asset managers to implement. Accordingly, BlackRock, like its Bitcoin spot ETF competitors Fidelity Investments and Invesco, should have no direct interest in sending Bitcoin south.
Bitcoin opinions are subject to change
Especially since the image damage in the event of a Bitcoin collapse, as Peter Schiff predicts, would be very great for asset managers. It is also well known that the opinions of Wall Street employees are very diverse. Should mean: Some employees of the investment giants find Bitcoin good, others bad. There can therefore be no clear opinion and investment strategy regarding Bitcoin and other cryptocurrencies.
Even if not every Wall Street manager is likely to like the decision when the employer tries to offer Bitcoin ETFs or crypto brokerage for customers, the thrust can no longer be stopped in the long term.
Especially since more and more bankers in the traditional financial world are changing their minds about the digital asset class over time. This is best shown by the BlackRock boss himself. In 2017 he had criticized Bitcoin as an “index for money laundering” . The question of whether Wall Street is now serious about bitcoin can be answered with: “yes, mostly now”.
